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Here are some real facts that the movie is based on:

General Vasquez
 

Hector Elizondo's character, General Francisco Vasquez, is actually based on a real character in Paraguay's current history. 

 

The 1996 Coup

Former general, Lino Cesar Oviedo, attempted a coup in April of 1996.  Oviedo was then accused by the president, Wasmosy, of opposing all government policies and for interfering with the political process.  He was then ordered to resign.  This was an order which Oviedo refused to take and he threatened to kill Wasmosy.  After a standoff, Oviedo finally agreed to resign if he was named Minister of Defense.  Wasmosy agreed even though public opinion was against it.  This caused Wasmosy to reverse his decision, which angered Oviedo even further. 

 

Elections

In 1997, Oviedo ran for the primaries of the main political party of Paraguay, the Colorado Party, and won with a great deal of popular support.  Many Paraguayans were unhappy with the current government and Oviedo was the kind of leader that they thought would be good.  He connected with many peasants and unemployed workers promising them everything.  Wasmosy, who was not able to seek re-election, then arrested Oviedo for his involvement in the coup of 1996.  He was then sentenced to ten years in prison.  Promising his release once president, his vice-presidential candidate, Raul Cubas Grau, ran in Oviedo's place and won in 1998.  He pardoned Oviedo soon after taking office.  However, the Supreme Court ordered him back to jail by December.  Cubas ignored the order. 

 

Argaņa

Luis Maria Argaņa was the vice-presidential nominee when Cubas was made the presidential nominee.  Rivals, they joined together to prevent the current faction of the Colorado party, Wasmosy's, to win.  On March 23, 1999, Argaņa was assassinated in the morning on his way to work.  Immediately following the assassination, many placed the blame on Oviedo and CubasOviedo soon fled from the country amidst accusations to Argentina, where he was granted asylum.  Cubas fled to Brazil, where he was granted asylum.  Senate leader, Luis Gonzales Macchi, then became president and will serve his term until 2003. 

 

Life in Exile

Oviedo was living in Buenos Aires during his asylum years.  However, after getting into some political meetings, he was sent to live in the Patagonian desert in Southern Argentina.  This was so that he would not be able to contact people to cause political problems while in exile, which is always part of the agreement.  Oviedo, however, one day disappeared.  He fled from Argentina and wasn't found until months later when he was caught by Brazilian police in Foz do Iguazu, on the border with Paraguay.  During this time, back in Paraguay, the people were voting for a vice-president.  The opposition's candidate, Yoyito Franco, won with many of Oviedo's supporter's votes.  In Brazil, Oviedo requested political asylum.  Brazilian authorities allowed him to remain in the country until further notice, after he was declared a political refugee.  In Paraguay, which was in an economic depression, thing deteriorated and everyday Macchi lost more and more supporters. 

 

Recent Events

On July 15th, 2002, Oviedo was in the news once again.  After many days of intense riots, President Macchi suspended some civil liberties, ordered a state of emergency, and closed the borders.  Two people died in clashes with the police.  Macchi accused Oviedo of ordering the protests to further destabilize the country into a coup.  The coup would allegedly take Macchi out of power and instate Franco, allegedly an Oviedo supporter, into the presidency.  Macchi claimed that the conspiracy was so that Oviedo would return to the country, with the help of Franco, and run for elections in 2003.  On the 18th, the state of emergency was revoked and opposition leaders claim that they will continue to demand the resignation of Macchi, but deny that Oviedo had any involvement in the riots.  In Brazil, Paraguayan authorities released tapes and recorded messages between Oviedo and an unknown man talking about taking down the president.  While Oviedo denied the evidence and that he had any further political ambitions, Brazilian authorities denied his request for visa renewal.  Anything could happen at this stage.   

Weapons Smuggling and the US

Paraguay has always been known to be a haven for weapons smugglers.  There is very little control over the borders, and corruption is rampant in custom points.  Many guns are smuggled into the borders with Brazil, Argentina, and Bolivia.  Its central location in South American provides it with a large range of routes.  The idea behind Vasquez's involvement with US authorities comes from a similar involvement between former Argentine president, Menem, and the US during the Bosnian War.  While no evidence was used to support his claim, in the movie the story is left in the air.  The United States has shown signs of using its power in Latin American governments before.  Not once did they support Oviedo during his campaign and even today they condemn him.  This angers some Paraguayans who claim that the US wants somebody that they control in the government.  They say that the United States wants a white, blonde, and blue-eyed candidate that they can control.  They ask that the US not get involved and let the Democratic process continue.  That is, let the people decide.  American authorities, however, respond by saying that Oviedo has never shown Democratic intentions.   

The School
The American Academy in Asuncion is primarily based on two different real schools that exist in the country.  Almost all students in Paraguay, those who can afford it, go to private schools, and American High Schools are very popular.  The two schools this is based on are Asuncion Christian Academy (ACA) and the American School in Asuncion (ASA).  Both schools are the home to children of foreign servicemen, businessmen, and politicians.  Teachers at both of these schools usually stay for a period of two or three years before returning home to the US or Canada (and sometimes other countries).  One interesting sidenote is that security at neither one of these schools is particularly as tight as the one seen in the film.